New Brunswick's economy to show moderation, says RBC



    TORONTO, July 3 /CNW/ - The economic expansion in New Brunswick is
forecast to remain moderate, with growth of two per cent for 2008, followed by
2.5 per cent in 2009, according to the latest provincial economic outlook
released today by RBC.
    "Like most provinces, growth in New Brunswick is mostly driven by the
domestic economy, as export-dependent sectors struggle" said Craig Wright,
senior vice-president and chief economist, RBC. "While strong market
conditions for metals, fertilizers and energy will be positive factors for the
province's exports, these will continue to be offset by woes in the
all-important forest products sector."
    The report stated that the province's domestic demand is fueled in large
part by healthy employment gains, although the pace of job creation will
likely taper off somewhat from last year's huge gains.
    Construction continues to be a mainstay of activity both on the
residential and non-residential sides for New Brunswick. However, softer
housing resale activity coupled with a recent deterioration in affordability
should cool new housing construction over the second half of this year and
into 2009. In addition, the winding down of work on key projects and delay of
new ones will slow non-residential construction next year.
    The main theme of the Provincial Outlook continues to be the different
paths the Eastern and Western parts of the country are taking. Record-high
commodity prices and strong global demand for resources sustain unprecedented
prosperity in the Western provinces, while the strong Canadian dollar,
downturn in the U.S. economy and high energy prices continue to cause hardship
in key sectors in provinces east of Manitoba. Saskatchewan is projected to
lead all of the provinces in economic growth for both 2008 and 2009, followed
by Alberta, while Newfoundland and Labrador and Ontario are expected to lag
the group this year, but should show some improvement next year.

    The RBC Economics Provincial Outlook assesses the provinces according to
economic growth, employment growth, unemployment rates, personal income
growth, retail sales, housing starts, and the Consumer Price Index.
    According to the report (available online as of 8 a.m. E.D.T., at
www.rbc.com/economics/market/pdf/provfcst.pdf), provincial forecast details
are as follows:

    
                    Real GDP           Housing starts         Retail sales

                                          Thousands
                  07    08    09        07    08    09        07    08    09
                  --    --    --        --    --    --        --    --    --
    NFLD.        9.1   0.2   1.3       2.6   2.6   2.0       8.9   6.0   2.0
    P.E.I.       2.0   1.2   1.6       0.8   0.7   0.6       7.7   4.5   3.7
    N.S.         1.6   2.0   2.4       4.8   4.7   4.0       4.2   5.5   4.5
    N.B.         1.6   2.0   2.5       4.2   4.2   3.4       5.7   4.6   4.0
    QUE.         2.4   1.0   2.3      48.6  47.1  40.0       4.6   4.3   4.4
    ONT.         2.1   0.7   2.2      68.1  68.7  59.3       3.9   4.4   4.5
    MAN.         3.3   2.7   2.7       5.7   5.9   4.5       8.8   8.5   7.0
    SASK.        2.8   3.7   3.8       6.0   6.6   4.5      13.0  12.0  11.0
    ALTA.        3.3   3.1   3.0      48.3  38.3  35.1       9.3   4.5   7.0
    B.C.         3.1   2.2   2.9      39.2  37.2  30.5       6.7   4.5   7.5
    CANADA       2.7   1.4   2.5       228   216   184       5.8   5.2   5.6


                   Employment                CPI


                  07    08    09        07    08    09
                  --    --    --        --    --    --
    NFLD.        0.6   2.0   0.5       1.5   2.5   1.4
    P.E.I.       1.0   1.3   0.3       1.8   3.2   1.5
    N.S.         1.3   1.0   1.9       1.9   3.0   1.6
    N.B.         2.1   1.6   1.0       1.9   1.8   1.5
    QUE.         2.3   1.4   1.3       1.6   2.2   1.4
    ONT.         1.6   1.5   1.3       1.8   2.0   1.5
    MAN.         1.6   2.1   1.7       2.0   2.0   1.5
    SASK.        2.1   2.4   2.3       2.8   3.4   2.6
    ALTA.        4.7   3.0   2.1       5.0   3.3   2.5
    B.C.         3.2   2.6   2.5       1.8   2.0   1.5
    CANADA       2.3   1.9   1.6       2.1   2.3   1.6
    





For further information:

For further information: Craig Wright, RBC Economics, (416) 974-7457;
Robert Hogue, RBC Economics, (416) 974-6192; Jackie Braden, RBC Media
Relations, (416) 974-2124


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